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NatWest shareholders have ramped up pressure on chair Sir Howard Davies to step down for mishandling the fallout from the closure of Nigel Farage’s bank account.

“He’s clearly not in charge,” said a top-20 investor on Tuesday. “Banking is about trust and confidence. That’s sacrosanct and starts with the tone from the top.”

NatWest chief executive Dame Alison Rose stepped down in the early hours of Wednesday morning after admitting to misleading a BBC journalist about the closure of the former UK Independence party leader’s account at its private bank, Coutts.

The announcement came only seven hours after Davies, who has been chair of NatWest since 2015 and is nearing the end of his tenure, said that Rose retained the “full confidence” of the board despite her confession. He praised her as an “outstanding leader of the institution” and said that it was “clearly in the interest of all the bank’s shareholders and customers that she continues in post”.

“It was very surprising that Davies didn’t clear his lines with No 11 first,” said a second top-20 investor. “My suspicion is that he will end up going, but probably shouldn’t have to.”

NatWest shares were down more than 3 per cent in early afternoon trading, making them the biggest faller on the FTSE 100 and extending their decline to almost 11 per cent this year.

The drop comes despite the boost in earnings the bank has received from rising interest rates. NatWest reports its second-quarter earnings on Friday. The government owns 38.69 per cent of the UK lender, down from a peak of 71 per cent in 2016.

However, despite the shareholder pressure, senior government figures suggested that Davies’ position was more secure than Rose’s had been, given that she quit after admitting she personally leaked customer information in potential breach of data confidentiality laws.

“The issue was Alison — she briefed a journalist incorrect information,” said one Treasury figure. 

On Wednesday, Farage said the bank should “put in place very quickly a new interim board”. He has also called for Coutts chief executive Peter Flavel to go.

“He always wants a revolution,” said one minister, noting that Davies is already approaching the end of his tenure.

Davies, an economist who steered the former Royal Bank of Scotland through a restructuring and return to profitability, said in April he would step down by July 2024, and the bank has already begun searching for his successor. He is approaching nine years as chair, which is the recommended limit under UK corporate governance rules.

The first shareholder said that the Farage episode “has taken far too long and Nigel Farage had to campaign for the truth. That’s wrong. What about people who don’t have his platform? The board must have known the reason for his being excluded from Coutts.”

NatWest declined to comment. Davies did not respond to a request for comment.

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